A Comprehensive Analysis of Segmentation, Targeting, and Positioning

This report delves into the core concepts of market segmentation, targeting, and positioning (STP), a crucial marketing approach used by businesses globally. It explores the STP analysis framework, emphasizing its role in designing targeted messaging and digital strategies. The report defines and analyzes the key components: segmentation, which involves dividing the market into distinct groups based on various characteristics; targeting, which focuses on evaluating and selecting specific segments to enter; and positioning, which involves arranging a product or service to attract customers within the targeted segment. The report provides practical applications of STP analysis, with examples from the oil and gas industries, food supply chains, and restaurant sectors, highlighting how businesses leverage these strategies to enhance their market share and profitability. The report also discusses the factors influencing segmentation, targeting, and positioning decisions, offering recommendations for improving the effectiveness of STP strategies across different business sectors. The report concludes by emphasizing the importance of thoughtful positioning to achieve competitive advantage.

Running head: SEGMENTATION, TARGETING AND POSITIONING
SEGMENTATION, TARGETING AND POSITIONING
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Introduction
The main aim of this paper will be to discuss about the concept of market segmentation,
targeting and positioning of the goods and services that are offered and sold by various business
houses across the world. Evaluation as well as critical analysis will be done on the concepts and
theories of segmentation, targeting and positioning, which is known as STP Analysis, which
plays an integral part in the overall business operations that are performed by the companies
globally. Three sectors has been selected from where the examples will be provided, which are
oil and gas industries, chain supply of food and restaurants. Recommendations will also be
provided through which the analysis of segmentation, targeting and positioning can be made
better by various companies across the world.
Thus, it can be stated that the main objective of this paper will be to discuss about the
concept of STP, which stands for segmentation, targeting and positioning; which helps the
marketers to design their messaging approach along with developing and delivering tailored and
relevant messages that possess the power to engage the segmented and target audiences. This
approach is also treated as one of the most important and widely used marketing tool, which
helps in designing digital strategies required for content marketing, and marketing archetypes
and personas that help in developing targeted and applicable digital communications. This can
also be regarded as customer and audience approach to marketing (Armstrong et al 2018).
Literature Review
Segmentation
The concept of market segmentation helps the management of the business entities to
classify or segregate the people into divisions or groups who will possess same characteristic.

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This will help to identify the needs and requirements of the people of these groups, and can offer
their products and services accordingly by strategizing different plan of actions for different
groups (Huang and Choi 2017). Each of these groups possess different features or characteristics,
which help the owners and management of the organizations to plan accordingly and target them
to sale their products or services. This has to be done efficiently as the features of the people
within the same group need to match and cannot be differentiated, so that an effective launch of a
particular good or service can be done by the management of the business entities who has
segmented the market place or places (Chang et al 2017).
Management segments their target market based on four main variables, which are
demographic, psychographic, geographic and behavioural. There are factors under all these
variables which helps the organizations to classify their target group and select the one or two to
be targeted in order to sale their particular product or service (Bajaj 2017). Strategies are
designed and implemented based on all these factors, but the management often fails to identify
the proper targeted segment. Many people might be present in more than one variable, which
will make difficult for the management of the business companies to segment efficiently and
effectively, and this leads to the failed launch of their product or service for which they have
segmented or divided their identified market place. Market research is required to segment an
identified market place across the world by a company to start their business operations or
launch a good or service in that market (Dolnicar, Grün and Leisch 2018).
Targeting
Targeting, on the other hand, involves the process of evaluation of each of these
segments, so that the attractiveness of these segments can be evaluated and one or more
segments can be targeted by a particular organization to enter that market where the

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segmentation has been done. It plays an important part targeting the proper segment will help the
company to increase both the market share and revenue earning for that particular product or
service for which the market has been segmented into different groups. Improper target will
hamper the flow of business operations of the companies who has segmented the market
(Barabash et al 2017). There are mainly five factors that helps to evaluate the commercial as well
as potential attractiveness of each of the market segment, the names of which are discussed
earlier in this paper.
The five factors are criteria size, difference, money, accessible and focus on different
benefits. All these factors help to identify the segment properly so that the market share for the
product or the service can be launched in the market place and a market share can be possessed.
Measuring tools and techniques have been identified as the major requirements in order to
identify the segmented target group and target them to sale a particular product or service (Wu,
Buyya and Ramamohanarao 2018). Often the wrong group is targeted by the management of
business entities and instead of making profits from these segment, they start to make loses.
These leads in closure of many business start-ups, along with taking back the unsuccessful
product or service from the market places after they failed to possess an impression there. The
potentiality along with the amount of profitability that the companies can meet need are
identified by the research team from various organizations before launching their product or
services in global market places (Kaul 2019).
Positioning
Positioning of a product or a service can be regarded as the process of arranging them in
a desirable, distinctive and clear place, so that it can attract the customers and increase the desire
to purchase that particular product or service. This stage helps to determine the process of

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perceiveness of a particular brand so that it can fit into the daily lives of the people who has been
segmented and targeted by the owner of that brand of product or service. Positioning, in other
words, helps to map the variables that are discussed in the segmentation and targeting sections
earlier in this paper, and defines the area where the offerings of different business entities are
placed relative to that of the rival business entities from the viewpoint of the customers present
across the world. Positioning can also be regarded as a conceptual tool which helps tailoring the
value proposition that can communicate to the customers present in the markets globally (Diwan
and Bodla 2019).
It can be stated in this context that thoughtful positioning is critical to gain the
competitive advantage by various business houses through their products or services in the
market places. As positioning is a component of branding, perceptions and feedbacks that are
received from the viewpoint of the customer’s that influences the brand positioning statement in
the respective market places where the brand is positioned in order to increase the sale along
with the revenue (Wirtz and Lovelock 2017). Three types of positioning possess the power to
impact a particular brand along with its competitive advantage. They are functional, Experiential
and symbolic. These three elements combine together and helps to position a particular brand in
global market place, but these may also fail to taste the success due to improper division of the
market along with targeting the wrong group of segmentation (Vairamuthu and Krishnan 2017).
Applications
From the above discussion, it can be summed up that this analysis of segmentation,
targeting and positioning benefits the management of different business houses from all the
business sectors that exist in business environment across the world.

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STP Applications in Oil and Gas Industries
Market in oil and gas industries sector depends on the requirement of the final products
that are offered by this industry (Zafari 2017). It includes both the market value and market
volume, along with the information or feedbacks from clients, which plays an important role in
application of segmentation, targeting and positioning by the management of the organizations
that operates within this particular sector (Redutskiy 2017). The overall oil and gas industry
along with the size and location of the customers who avail the finished products that are
generated from this industry. It can be noted in this context that this industry is one of the biggest
business industry among all other business industries that exist in the global business
environment. Segmentation is also done by maintaining the national as well as international
borders of the nations from where the finished products are generated and sold (Agis, Brandta
and Bretta 2016).
The technology for which the customers are using the finished products of this industry
are also taken into consideration while segmenting the market and targeting the right segmented
group according to the features or characteristics of that group. The buying abilities of the
organizations also impacts the segmentation process, which will automatically possess an impact
on targeting and positioning of the products that are sold in this industry. Products are positioned
according to the urgency of the requirement along with the form of energy possessed by them.
The finished products that are derived from this industry are gasoline or petroleum, diesel,
solvents, lubricating oils, naphtha and different refinery gases. Apart from this, the application of
these products and the order size of them also helps to decide the positioning factor of these
products (Grimshaw et al 2017).

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STP Applications in Chain Supply of Food
In this particular sector which is under the hospitality industry, the tastes and preferences
of the people are the most important factor that is required to segment the market place. A
company can get highly benefited by the segmentation strategy while tailoring their supply
business to each product as well as customers (Valdez-Juárez et al 2019). By segmentation, it is
possible for the food chains to reduce complexity in terms of product design and delivery
techniques (Hemsley-Brown 2016). Performing regular demand analysis and also cost-to-cost
analysis is essential for promoting segmentation in food chain supply.
The demand of the food in different sectors and regions of the world helps to target them
separately with different targeting strategies (Arndt et al 2016). This helps to meet the demand of
these sectors and regions, but sometimes the quality of the food fails to meet the demand, which
possess an adverse effect on the entire marketing tool of segmentation, targeting and positioning
(Ozkan and Fawole 2017). Positioning strategies also help to put various kinds of food into the
food supply chains according to the requirement of the people across the world. For example, if
tea is required in one of the nations, then all the demands of tea required need to be placed and
acquired through this food supply chain, and effective usage of this helps to perform healthy and
smooth flow of business operations in that selected nation (Abdul-Hamid and Hinson 2016).
STP Applications in Restaurants
Market segmentation is an integral part of the strategies applied in the restaurant
industries. Segmentation in the restaurants, in most cases, depends upon the service speed and
the service amount given to the customers. Full service, quick service, drinking and eating place
and retail host are the four major marketing segments in the restaurant sector (Johnson, Danner
and Bastian 2017). Full-service restaurants are dine-in restaurants that offer fully prepared meals

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to the customers. Quick service segment refers to the restaurants that focus on a single type of
meal for take away or buffets. Caterers and standing vendors that serve food to the customers to
be eaten right away are the eating and drinking segments. Lastly, the retail host segment
comprises of grocery stores and other franchises. Target marketing is another important strategy
for restaurants in order to save the expenses of advertising. Customers can be appealed directly
based on their needs and interests (Davydova 2016).
In a restaurant industry, every decision-making procedure becomes easy when the target
customer is understood rightly. They can be targeted based on their choice of cuisine, music
played and even interior decorations (Starovoytova and Chugunova 2016). If one is not clear
about a particular target customer from the beginning, the entire restaurant concept will become
unfocused and the value proposition of customers will be also unclear. Product positioning
strategy in the restaurant industry is the base of marketing (Majid et al 2018). The way one wants
the product to hold its place in the market, can set up the foundation of communicating the
product value to the customers. The chief benefits of a product must be articulated carefully
which will ensure the promotional activities to meet the customer needs. The key elements of
product positioning in restaurants include the restaurant’s vision, mission, tagline, market
category, consumer challenges, company and product differentiations and brand essence.
Positioning is the chief ingredient while developing the brand strategy (Hubbard 2018).
Conclusion
From all the above discussion, it can be concluded that this analysis of segmentation,
targeting and positioning possess a vital in the overall business operations of the business houses,
whether they operate locally, regionally or internationally. Segmentation, targeting and
positioning helps the marketers to design their messaging approach along with developing and

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delivering tailored and relevant messages that possess the power to engage the segmented and
target audiences (Tyagi et al 2019). This approach also helps to treat as one of the most
important and widely used marketing tool, which helps in developing the digital strategies for
content marketing, and marketing archetypes and personas that help in developing targeted and
applicable digital communications, which is also regarded as audience and customer approach to
marketing (Raji and Zainal 2017).
Recommendations
Though the business houses follow the benefits of the analysis of segmentation, targeting
and positioning, there are flaws in using this analysis in the marketing management of the
organizations. Recommended steps or actions are required to be followed by the management or
the decision making people in order to reduce the flaws. Some of the recommended actions are
given as follows:
The first and foremost factor that the researchers need to follow is to gather proper,
ethical and relevant data that will help to segment the market efficiently, which will
automatically help in effective targeting to the identified segment and positioning of the product
or service for which the organization is using this marketing tool. This will help the company to
have a successful launch of their product or service in the identified market place (Rajkumar and
Abraham 2018).
The variables or the factors based on which the market is segmented need to be followed
properly, so that the people present in a particular market place can be put into the right segment
and can be turned into customers or consumers from prospects by the company who is going to
target them (SINGH 2018). This will help to gain an effective brand exposure in the global,

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regional or local market place, which will automatically help to increase the market share for that
product or service.
Another important recommended step that need to be followed is to design the strategy
for targeting a particular segment or group. Selection of the right strategy will help to target the
segment effectively, and maximum benefit can be utilized from this particular segment through
this effective targeting strategy (Lotayif 2016).
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